Good day, and thank you for standing by. Welcome to the Universal Stainless & Alloy Products second quarter 2023 conference call and webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a Q&A session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To remove yourself from the queue, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to June Filingeri. Please go ahead. Thank you. Good morning. This is June Filingeri of Comm-Partners, and I'd also like to welcome you to the Universal Stainless call and webcast. We are here to discuss the company's second quarter 2023 results, reported this morning. With us from management are Denny Oates, Chairman, President, and Chief Executive Officer, Chris Zimmer, Executive Vice President and Chief Operating Officer, John Arminas, Vice President and General Counsel, and Steve DiTommaso, Vice President and Chief Financial Officer. Before I turn the call over to management, let me quickly review procedures. After management has made formal remarks, we will take your questions. The conference operator, Norma. Whoops, sorry about that. will take your questions. Please note that in this morning's call, management will make forward-looking statements. Under the Private Securities Litigation Reform Act of 1995, I would like to remind you of the risks related to these statements, which are more fully described in today's press release and in the company's filings with the Securities and Exchange Commission. With the formalities complete, I would now like to turn the call over to Denny Oates. Denny, we are ready to begin. Okay, June. Thank you. Good morning, everyone. Thanks for joining us today. The main highlight of our second quarter performance is improving profitability, a product of the positive momentum we described on our last call. More specifically, gross profit margin reached 14.3% of sales, despite an across-the-board drop in commodity metal prices that resulted in negative surcharge misalignment of about a half a million dollars. First quarter gross margin was 11.7%. The margin improvement in the most recent quarter led to a more than doubling of operating income to $3.1 million. We turned the corner on bottom-line profitability, with net income reaching $900,000 or $0.10 per diluted share. The main drivers of second quarter profitability were higher shipment volume, both sequentially and year-over-year, increased production, improved productivity at key operations, and higher base selling prices. We announced two additional price increases in the second quarter on bar and plate products. Adjusted EBITDA of almost $8 million in the second quarter, was the highest achieved since the second quarter of 2019, and increased 17% from last quarter. Looking at our top line, net sales remained strong at $69 million, an increase of 5% sequentially and up 32% year-over-year. That's the highest level since the second quarter of 2019. Year-to-date sales reached $135 million, an increase of 35% over last year. The second quarter sales included premium alloy sales of $12.9 million, which is 27% lower than the record first quarter, but 46% higher than the second quarter of 2022. Year-to-date premium alloy sales were up 72% to $30.5 million or 23% of sales. We expect premium product sales to be above Q1's record levels during the second half of the year. Our premium alloy sales are for aerospace applications. Aerospace sales increased 5% to a record $51 million in the second quarter, up 44% year-over-year, and up 52% year-to-date. On the last call, we pointed to an expected modest improvement in sales in the second quarter, with growth accelerating during the second half of the year. Second quarter sales, including premium alloys, were in line with our plans. Our positive outlook for the final two quarters of the year remains unchanged. It's based on the continued strength and demand for our products, especially our premium alloys, tempered somewhat by seasonality and declining surcharges. June 30, total order backlog before surcharges remained robust at $355 million, fell $11 million from Q1's record high, as we work with customers to control our order entry. The backlog of orders scheduled to ship over the next 12 months actually increased 6% compared to March 31. We continue to diligently work to reduce extended lead times. Premium alloys continue to represent about 35% of our backlog. Turning to our financial position, total debt was reduced by $6.2 million to $93.3 million during the quarter. Revolver availability remained unchanged at an adequate $24 million. Managed working capital was $148 million, down a million and a half dollars sequentially, representing about 54% of sales. Receivables are in good shape, with DSO falling to 41 from 50 at year-end 2022. Inventory at the end of the second quarter increased a modest 1.4% to $152 million, reflecting improved turns, partially offset by higher volumes of premium grades and work in process. Second quarter capital expenditures were $2.4 million, bringing the year-to-date total to $6.9 million. We expect full year capital expenditures of about $16 million, with about half of that amount for our investment in remelt capacity in our North Jackson facility, where we're adding two vacuum arc remelt furnaces. Equipment installation is underway, and we are working towards full integration of operations beginning the first quarter of 2024. Our objective is to expand our product portfolio with more technologically advanced, higher margin premium products, to enhance our capabilities, our cost structure, and also our growth prospects. We continue to deepen our management team in the second quarter with the naming of Rick Cecola as Vice President of Supply Chain and Purchasing. Rick is a 13-year veteran of Universal and most recently served as Universal's Supply Chain Director. He reports directly to Chris Zimmer, our recently named Chief Operating Officer. Two additional updates. We announced separately today that we have engaged Baker Tilly as our new auditor, effective following the filing of our second quarter 10-Q. Baker Tilly replaces Schneider Downs, who has been our auditor of record for over 20 years. We have been pleased with the quality of professional services that Schneider Downs has provided, and we look forward to working with an audit firm of the caliber of Baker Tilly. Additionally, we are currently in negotiations on a new labor agreement with the union representing the hourly employees at our Bridgeville facility. The current five-year agreement expires on August thirty-first. Chris, I'll turn the call over to you for your review of operations. Thank you, Denny. Good morning, everyone. I'll start with premium alloys and our vacuum induction melting operations, which are the critical platform for our growth strategy. While premium alloy sales were sequentially lower in the second quarter due to shipment timing, our results year to date are 72% higher than the first half of 2022, we remain on track for a record year of sales in 2023. Operationally, we achieved record vacuum induction melting productivity during the second quarter, which supports our rapidly growing premium alloy sales plan for the second half of this year. Despite continued challenges stabilizing our workforce, we were able to increase our total production sequentially and expect additional production increases in the third quarter. Production levels at our remelt shops, hot working mills, and major finishing units all improved sequentially as we continue our march back to pre-COVID production levels. As most of you know, Rolls-Royce has been a long-standing customer of ours, and I'm pleased to report that Universal was again named to the Rolls-Royce High Performing Supplier Group for 2023. This is a very short list of suppliers, and we are proud of the great job that our team has done to receive this recognition. Turning to commodities. Nickel continued to slide in the second quarter, declining 9% sequentially into the low $9 per pound range. Other metals followed suit, with nearly every metal we track down quarter-over-quarter and year-over-year. The reasons for the decline are mainly weak manufacturing and trade data from China, weaker European demand, and concerns about further monetary policy tightening in the U.S. and the effect on the U.S. dollar. Overall, we expect negative surcharge misalignment for the third quarter. Let's turn to end markets, beginning with aerospace, our largest market. We saw additional growth in our aerospace sales in the second quarter of 2023, which increased 5% to a record $51.3 million, or 74% of sales, compared to $49 million and 74% of sales in the first quarter of 2023. Aerospace sales increased 44% from $35.7 million in the second quarter of 2022, and year to date, sales totaled $1 million, an increase of 52% from the same period, 2022. The drivers of commercial aerospace demand continued to gain momentum in the second quarter. Consumer demand is up. The pace of deliveries at Boeing and Airbus has increased. Carriers are turning over their fleets for more fuel-efficient planes, and build rates are ramping up. We attended the Paris Air Show last month, and it was one of the most positive shows in memory. Looking at the airplane manufacturers, Boeing delivered 136 planes in the second quarter with a better-than-expected 60 deliveries in June. Boeing's orders were strong in the second quarter at 460 planes, including a 220 plane order from Air India. At the end of June, Boeing's net backlog stood at over 4,800 planes. With the continued increase in backlog and strong Q2 deliveries, Boeing is increasing the 737 MAX monthly build rate to 38 from the current rate of 31, plans to reach 50 in the 2025-2026 timeframe. We should learn more about Boeing's plans on their call this morning. At Airbus, June deliveries totaled 72, bringing year-to-date deliveries to 316. Airbus had gross orders in June of 902 planes, including a firm order for 500 A320 family aircraft from IndiGo, India's largest airline. That order set the record for the biggest single purchase agreement in the history of commercial aviation. Earlier this month, Airbus opened a new assembly line for the A321neo in southwest France, part of its efforts to reach a build rate of 75 on the A320 family by 2026 amid record demand. The current build rate is at 45 planes per month. IATA added more good news in their May report. Total air traffic in May increased 39% from May of 2022, and global traffic is now at 96% of the pre-pandemic levels. Domestic traffic for May rose 36%, making it the second month in a row that it has exceeded pre-pandemic levels. Meanwhile, international traffic jumped 41% versus May of 2022, with all markets recording strong growth. In the U.S., TSA recorded impressive passenger volume of 2.9 million on May 30th, versus 2.5 million on that date in 2022, and 2.2 million in 2019. Volume had fallen to 800,000 in 2020. That healthy activity translated into record revenue and profits at Delta Air Lines, which reported robust domestic demand and record international performance in the second quarter. The company expects the same high level of demand to continue through the quarter. United Airlines and American Airlines also reported record results in the quarter. Defense market demand continues to be driven by the global conflicts that we read about daily. Lockheed Martin, for example, reported record backlog in the end of the second quarter, including a $7.8 billion contract from the Pentagon for 26 F-35 fighters. In rotorcraft, our customer, Bell Textron, received the go-ahead to move forward with manufacturing its tiltrotor aircraft, the V-280 Valor, the U.S. Army's future attack helicopter, which will eventually replace Sikorsky's Black Hawk. In other deals, Germany will purchase 60 Chinook helicopters from Boeing. The purchase is a part of a shift in policy following Russia's invasion of Ukraine. The challenge for both commercial aerospace and defense manufacturers is to overcome continued supply chain shortages to increase build rates. The parallel challenge for Universal's customers is to meet enormous demand for our products, which is expected to continue through 2024 and beyond. Customers are fully in a pull mode. They describe their inventories as hand-to-mouth and have a record backlog of orders waiting for material from the mills. The heavy equipment market remained our second-largest market in the second quarter of 2023, with sales of $8.9 million or 13% of sales, up 29% from sales in the first quarter of 2023, and up 24% from the second quarter of 2022. Metal fabrication demand drives our heavy equipment market sales, mainly for automotive applications, especially model changeovers. The strong sales pickup we saw in the first quarter continued in the second as customers continued to replenish inventories of plate product. While demand in the heavy equipment market can be lumpy, we expect our sales to that market to remain solid in the third quarter. The general industrial market became our third-largest market in the second quarter of 2023, with sales of $2.3 million or 5% of sales, which is down 7% from the first quarter of 2023, but up 76% from the second quarter of 2022. Our general industrial sales are mainly for semiconductor manufacturing. Based on market outlook, we are bullish about 2024, with the ramp-up beginning in the second half of this year. The oil and gas market moved down to 4th place in the 2Q of 2023, with sales of $3.1 million or 4% of sales, versus $4.8 million in the 1Q of 2023. Demand in the oil and gas market in the 2Q was negatively impacted by market softness in North America, including muted drilling activity in the U.S., as indicated in lower rig counts. Baker Hughes, Halliburton, and Schlumberger are all expecting softness in the U.S. land market to continue in the H2 of 2023. While the long-term prospects for our oil and gas segment are positive, we are temporarily shifting more of our capacity to higher-margin aerospace products to better respond to the enormous demand in that market. Power generation market sales totaled $1.3 million, or 2% of sales, in the second quarter of 2023, a 23% increase from $1.1 million in the first quarter. Our power generation sales is program-specific, heavily reliant upon maintenance of industrial gas turbines for electricity generation. We remain positioned to benefit from any additional maintenance opportunities following this unusually hot summer and any ongoing investment in new domestic gas turbines. Let me turn the call over to Steve for his report on our financials. Thank you, Chris. Good morning, everyone. This quarter, we grew the top line by more than $3 million sequentially or about 5%, driven by higher base pricing and more shipment volume, despite the lower mix of premium product and falling surcharges. Compared with the second quarter in the prior year, our total net sales increased nearly $17 million or 32%, while our premium product sales are up by more than $4 million. Our second quarter gross margin totaled $9.8 million, or 14.3% of sales, the highest quarterly gross margin percentage since 2018. Consistent with our plan as we advance through this year, the margin expansion is a result of higher base prices, strong production volume and improved cost absorption, and more shipment volume. In the current quarter, these benefits overcame negative misalignment between our materials cost and the surcharge component of our total sales price from the impact of falling commodity metal prices. Selling, general, and administrative costs totaled $6.8 million in Q2, compared to $6.3 million in the first quarter and $5.3 million in the second quarter of last year. Although lower as a% of sales when compared to last year, the $1.5 million increase is driven by higher property insurance costs and higher employee-related costs. As a result of the higher gross margin, we earned operating income of $3.1 million, which more than doubled the first quarter and was $3.6 million better than the loss posted in the second quarter of last year. However, interest expense remained high compared to prior years, and at $2 million was approximately flat to Q1. Despite paying down our revolver by $6 million as a part of reducing our overall net debt position by $5 million, the variable interest rates we paid continued to rise through the quarter. The rate on the majority of our debt fluctuates with Term SOFR under the terms of our credit agreement. Term SOFR is currently hovering just above 5% and was around 4.5% throughout the first quarter, and 1.5% at this time last year. Accordingly, our average borrowing rate for Q2 was about 8.5%, which compares to 8.2% in Q1 and 4.4% in Q2 of last year. We posted pre-tax income of just over $1 million and recorded a provision for income taxes of $148,000, resulting in an effective tax rate of 14.2% for the quarter. Consistent with our discussion on prior calls, our estimated annual effective tax rate is less than the federal statutory rate of 21% due to the beneficial impact of research and development credits. Other items and discrete items during the quarter are not significant. Our net income for the quarter was about $900,000. Our diluted shares outstanding, reported in Q2, increased to 9.3 million, and our earnings per diluted share were $0.10. The Q2 performance brought us into a year-to-date net income position as well, totaling about $400,000 or $0.04 per diluted share. EBITDA was $7.6 million, which is $1.2 million better than last quarter and the highest level since the second quarter of 2019. Adjusted EBITDA totaled $7.9 million, including an add-back for non-cash share compensation expense. The reconciliation of adjusted EBITDA for each period presented is provided in the tables within the press release. During the second quarter, we generated $7.7 million of cash from our operations, despite investing $2.6 million in inventory, which primarily resulted from two record vacuum induction melt production campaigns executed during the 2023 second quarter. In total, we generated cash from our managed working capital as we drove accounts receivable down to $31.3 million, delivering a DSO of 41, and we grew accounts payable modestly in line with inventory. We used $2.4 million of cash on CapEx during Q2, and our free cash flow of $5.2 million was used to pay down debt. Additionally, our available borrowings under our revolving credit facility remained flat compared to March 31st at about $24 million, despite the expiration of our temporary credit agreement amendment that provided access to additional inventory collateral value throughout the third quarter and fourth quarter of 2022 and through March 31st of this year. This liquidity position, coupled with our ongoing expectation of positive quarterly operating cash flow, provides sufficient liquidity for our operations and market opportunity for the foreseeable future. This concludes my report, and I'll hand the call back to Denny. Okay, thanks, Steve. Let me summarize. We moved forward in strengthening our profitability and cash flow in the second quarter. Gross margins reached 14.3% of sales, despite negative surcharge misalignment and lower premium product sales. Higher shipment volume, increased production, productivity and yield improvements, and higher selling prices all contributed to the margin expansion. We turned the corner on bottom-line profitability, with net income approaching $1 million or $0.10 per share. Adjusted EBITDA increased 24% to $8 million. Total debt was reduced by 6%. Working capital metrics improved across the board. Second quarter sales remained strong at $69 million, growing 5% sequentially, consistent with our plan and expectations. Sales were 34% higher year-over-year and up 35% year-to-date, reaching $135 million. Premium alloy sales were up 46% year-over-year, but down 27% sequentially due to shipment timing. Demand for our premium products remains at record levels. Does our backlog, which contains over 35% premium alloy product, as demand in the commercial aerospace market continues to surge. Our major capital project at North Jackson remains on track, and we are working to have it operational in the first quarter of 2024. We continued to develop our organization during the quarter with the recent appointment of Rick Secola, a 13-year veteran with Universal, as Vice President of Supply Chain and Purchasing. Our second-half outlook is for sequential quarterly sales growth, fueled by a solid backlog, increasing base prices, and improving mix of premium product shipments, tempered somewhat by declining surcharges and normal seasonality. We further expect these top-line trends, coupled with increased production, to yield improved gross profit margins, positive cash flow, and further debt reduction. Let me conclude by recognizing our exceptionally talented team of hourly and salary employees, their dedication and hard work during the quarter and over the last several years. They have my sincere gratitude, as do our board, our customers, and our stockholders. That concludes our formal remarks. Norma, let's take some questions from our callers. Thank you. As a reminder, to ask a question during this session, you'll need to press star one on your telephone. To withdraw your question, please press star one again. Please wait for your name to be announced. Please stand by while we compile the Q&A roster. One moment for our first question, please. Our first question comes from the line of Phil Gibbs with KeyBanc Capital Markets. Your line is now open. Hey, good morning. Hey, Phil. How you doing? Good. You all mentioned surcharge misalignment in the second quarter, despite having pretty solid, gross margins anyways. Any way to couch what that may have been, either on a dollar or a percentage basis, and then maybe the same thing as it relates to how you're thinking about the third quarter? We've seen declining commodities during the second quarter, so we know surcharges are going to be lower in the third quarter versus the second. At the same time, our material costs should be drifting down as well. As that comes together in the third quarter, our best estimate, Phil, would be, it'd be misalignment would be negative, and it'd be about the same amount as we saw in the second quarter on a sequential basis. Not really any worse than what you already experienced in Q2. Was that 100 basis points, roughly, or more or less? About $500,000. Okay. Here's the point. 500 over 69 would be the. Is that what you're asking? Yes. Yeah. Okay. similar amounts in the, in the third quarter as of right now, is what you're saying? Right. Just the housekeeping. You had given some color on general items. What's the update in just in terms of the amount of liquidity that you have right now? Also, what should we be modeling for the book tax rate for the back half? Right now, as we begin to step through Q3, we're basically flat to the end of Q2, still at that $24 million level, and we are forecasting debt paydown in the third and fourth quarters. Probably not at the same level of the second quarter, but with our incremental improving margins and growing sales, even though CapEx, we expect to increase in the second half of the year, we will pay down debt in the third and fourth quarters and expand liquidity as well. $24 million as of now on that. Tax rate was somewhat unique, maybe perhaps too low in the first half. Should we expect the back half to be more normal on a 20%-25%? Yes, that's right. More normalized back half on the tax rate. Okay. As it relates to your mix and your pricing, that seems like it's more than going to overcome, this misalignment piece, just from a timing perspective. How many quarters or visibility do you have, in terms of that mix and pricing dynamic continuing to improve? Because I know you're turning over that, you know, that backlog, with sort of a richer outcome. Well, for the two components of our selling price, the base prices are known. A lot of our bar products and aerospace products are booked largely out the next four quarters. We will see sequential base price improvement in each one of those quarters. It gets a little cloudier on the surcharge front. We do know that the surcharges in the third quarter will drift down. B ut it remains to be seen what the fourth quarter or 2024 will look like. You know, we continue to manage our inventories tightly, to turn our inventories to keep up with those changes. Our expectation is that unless there is a wild spike in either direction, it should not have a significant impact on margins. Again, the sales surcharge component will track with commodities. Thank you. Then lastly, as it relates to the VIM and kind of the VAR complex, finally, really strongly finding its footing at this point in time. Are you gaining the wins and share that you would have hoped to have seen a couple of years ago with the forgers and maybe some of the OEM direct customers? Is that the idea behind it? I know, obviously, a lot of your business historically has been transactional, just maybe anything you could just say at a high level relative to that. Thanks. Yeah, that's right. We're now enjoying the benefits of the product development and the approvals that we've gained throughout the years. We're picking up share. That's where a lot of the growth in the backlog is coming from. The market is stronger, but for sure, we are into some new customers, new applications that we were not in before, with some of these new VIM products. We continue to have more and more conversations, some really good things coming out of the air show. I expect us to continue to build upon the successes we're having this year as we move into 2024. I don't see any reason why this momentum won't continue beyond 2024. That is one of the big parts of the success story here, is the additional VIM sales that are coming largely through share gains, riding the back of a strong market. Just kind of a sub question to that, is the North Jackson complex, is that from a mix standpoint, richer than the broader portfolio, or is it about the same? It's generally richer. The North Jackson plant and our plant up in Dunkirk are largely aerospace-driven. The Bridgeville plant is where we have our semi-finished products to the general industrial market, things like tool steel plate. That's a bigger part of what the Bridgeville plant does. The Bridgeville plant is also the primary feeder of input stock to North Jackson and Dunkirk. As I look at those three plants, North Jackson, Dunkirk, and our Titusville plant as well, are all very much aerospace-focused in the products that they put into the market. Thank you. Thank you for your question. Again, ladies and gentlemen, that is star one one to ask your question. To withdraw your question, please press star one one again. Again, to ask your question, that's star one one. I'm currently showing no further questions at this time. I'd like to hand the conference back to Mr. Oates for closing remarks. Thank you, Norma. Once again, thanks everyone for joining us this morning. We move forward with our strategy in the second quarter, remain optimistic about our growth prospects for the remainder of this year and well into 2024 and 2025. We look forward to updating you on our progress in our next call, which will be in October. In the meantime, enjoy the rest of the summer. Be well and stay safe. Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.